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Plans to establish National Health Insurance fund delayed until further input received

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Thursday, 26 October 2017 12:31

BusinessLive reports that the Treasury has delayed plans to set up a National Health Insurance (NHI) fund‚ saying it wants advice from the Davis tax committee on the feasibility of proposals to adjust the medical tax credits to finance it.

Former finance minister Pravin Gordhan said in the February budget policy statement that an NHI fund would be established to support priority health programmes‚ and that more details would be provided in the medium-term budget policy statement (MTBPS)‚ which was delivered by Finance Minister Malusi Gigaba on Wednesday. At the time‚ Gordhan said it might be partially funded by a reduction in the tax credits provided to medical scheme members. The Treasury now said more work needed to be done. Although the Treasury did not directly say so‚ the data indicate that scrapping or sharply reducing the medical tax credits will hit people with lower incomes particularly hard‚ and potentially make their medical scheme cover unaffordable. “The National Treasury and the Department of Health are working on proposals to expand NHI services in a progressive and affordable manner‚” Gigaba said in the MTBPS.